Infosys, India’s second- largest IT services exporter, will pay an annual compensation of a little over $5 million to its newly appointed chief executive officer (CEO) Vishal Sikka, making him the highest paid executive in the Indian IT services landscape. Sikka has displaced TCS CEO N Chandrasekaran from the top of the compensation pyramid.

Sikka’s annual base pay will be $900,000 and the variable component will be $4.18 million, according to a notice by the company’s extraordinary general meeting (EGM) on Wednesday.

Apart from this, Sikka will also be entitled to receive an annual grant of restricted stock units (RSUs) covering either the company’s equity shares or American Depository Shares (ADS) with a value of $2 million.

Sikka was appointed CEO and managing director of Infosys for five years — from August 1, 2014 to June 13, 2019.

Tata Consultancy Services (TCS) CEO N Chandrasekaran got a total compensation of just above $3 million (R18.68 crore) in financial year 2013-14. The next highest paid executive was TK Kurien, CEO of Wipro, with a total compensation of $1.02 million for FY14. Cognizant's Francisco D'Souza received a pay packet of $1.5 million for 2013.

Infosys has traditionally not paid its CEOs very high salaries as all of them belong to the founders’ group and hold substantial equity in the company. The outgoing CEO of the company, SD Shibulal, and his predecessor, S Gopalakrishnan, were paid in the range of $100,000 or less.

However, this was not the case for other key executives of Infosys, such as BG Srinivas, Ashok Vemuri and Stephen Pratt, whose compensation hovered around the $1-million mark. However, all these executives have left the company in the last one year.

Sikka comes into Infosys at a time when the company is struggling to achieve industry leading growth rate and get back to its pre-eminent status in the IT sector. The former chief technology officer of SAP comes with a reputation of being an innovator. In his 12 years at SAP, he developed a blockbuster platform HANA, besides looking after its cloud and technology solutions.

Infosys reported revenues of $8.2 billion for FY14, recording a growth rate of 11.5%. Net profit for the year stood at $1.75 billion, rising 1.5%.